Profiles in Mining: Contango ORE
Alaskan focus to the future
SPECIAL TO THE ALASKA MINER Contango ORE is one of the newer explorers developing future mine projects in Alaska. We asked Rick Van Nieuwen- huyse, President and CEO of Contango, to tell us more about the company and where it is headed. How long have you been in business, who founded the compa- ny and who are the leaders now? Contango ORE was spun out of Contango Oil and Gas in 2010 and at the time was headed by its principles Ken Peak and Brad Juneau, both with successful oil and gas back- grounds. Contango ORE hired Avalon Development Company to carry out exploration on the recently acquired Tetlin Lease. Avalon’s exploration team quickly identified what became the Peak Gold deposit (now re-named Manh Choh deposit), and over the next five years outlined a million-ounce gold deposit. In early 2015, Contango entered into a joint venture ar- rangement with Royal Gold who expended US$30 Million over the next 3 years and earned a 40 percent equity in- terest in the project. The joint venture completed a 43-101 resource containing ~ 1.3M oz gold averaging just over 4 g/t in an open pit mining scenario. Unfortunately, Royal Gold wanted to remain a royalty company and not be an opera- tor of mines. After running an unsuccessful sales process in 2018/2019, the joint venture became somewhat stalled with an operator that didn’t really want to operate. I began discussions with Contango’s board in Q4 2019 and joined the Company as President and CEO in January 2020 and quickly began negotiating an agreement between Kinross Gold, Royal Gold, and Contango ORE. Kinross was an obvious partner of choice with their under-utilized mill at Fort Knox, Manh Choh’s relatively high-grade ore could be trucked to their mill. This would allow the project to min- imize its environmental footprint at site by not building a mill and tailings facility, and greatly reduce up-front cap- ital costs and lower execution risk for the project. I knew Kinross senior management since we had worked together at Placer Dome, so although it required lengthy negotiations, the three parties reached the agreement we have today with Royal Gold as a royalty holder, Kinross as 70% owner, and Contango as 30% owner in a new joint venture with Kinross as operator. During the past 10 years, Contango had developed a close working relationship with the Tetlin Tribe and in our dis- cussions with Kinross we were comfortable that Kinross would continue that tradition. How has the company and your business evolved? Having grown up in Alaska, and now having worked over 40 years in Alaska and around the world as an exploration geologist, and with our recent agreement with Kinross, I feel Contango is well positioned to be a near term cash flowing company with a high-quality road accessible asset. While having been involved with several successful ex- ploration ventures in Alaska - NovaGold at the 40 Moz Don- lin gold deposit and Trilogy in the Ambler Mining District,
Photo Courtesy Contango ORE
we have yet to achieve the ultimate goal of producing met- als at these projects. With Contango and our recent business arrangement with Kinross I see the opportunity to achieve near-term commercial production and cash flow generation with which to build an Alaska based exploration and mining venture. What are your goals for your company, your clients, and your employees? I want to build an Alaska-based exploration and mining company where we develop our employees here in Alaska and not rely on experts from the Lower 48. Over the past 40 years, we have worked extensively with Alaska Native Cor- porations and Tribes, and I see a real opportunity to work collaboratively to develop our mining industry here in Alas- ka. Alaska Native Corporations made many of their land se- lections based on their mineral potential and there is much work that still needs to be done to find and build more mines. When I hear statements like “...mining needs to contrib- ute more to the Alaska economy…” I couldn’t agree more.
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The Alaska Miner
Summer 2021
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